The Federal Reserve (Fed) concluded its September interest rate decision meeting on Wednesday (21) and raised the benchmark interest rate by 3 yards to a range of 3.0% to 3.25. %, at the highest level since before the 2008 financial crisis.
The Federal Reserve announced a 3 yard rate hike on Wednesday, maintaining the largest single rate hike since 1994. At the same time, the Fed also raised its excess reserve interest rate (IOER) by 3 yards to 3 yards. , 15% from the previous 2.4%.
The Fed said in its latest statement that FOMC members expect continued interest rate hikes to be appropriate, with a strong commitment to bring inflation back to its 2% target.
According to the newly released interest rate chart, most voting members agreed to raise the benchmark interest rate above 4.25% this year, indicating November could raise interest rates for the fourth consecutive time. by 3 yards. The Fed expects this cycle of rate hikes to peak next year and the average terminal rate forecast has been revised to 4.6%, higher than the previous market forecast of 4.5%.
The Fed also updated the economic outlook, with officials unanimously predicting that US gross domestic product (GDP) growth will slow sharply to 0.2% in 2022, well below the 1.7% forecast at June, while GDP growth in 2023 and 2024 will slow sharply to 0.2%. The rate forecasts have been revised downwards to 1.2% and 1.7% respectively.
At the same time, with the Fed’s aggressive hike in interest rates, the Fed will estimate the unemployment rate next year at 4.4% from the current 3.7% and reduce the general expense price index. for personal consumption (PCE) expected for this year at 5.4%. Core inflation, which excludes food and energy, has been revised to 4.5% this year, with headline inflation expected to return to the Fed’s 2% target in 2025.
US stocks fell Wednesday after the Federal Reserve released its latest monetary policy decision.Dow JonesReverse previous earnings, 2 years vs. 10-year US Treasury yieldThe curve flattened out, with the 2-year US Treasury yield exceeding 4.1% for the first time since 2007.
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